Question 1

When the government uses a private subsidy in a market with an external benefit,to reach the efficient quantity of production,the subsidy must be equal to the marginal

Accepted Answer

A)  social benefit. 
B)  cost of production. 
C)  private benefit. 
D)  external benefit. 
E)  external cost. 
A)  social benefit. 
B)  cost of production. 
C)  private benefit. 
D)  external benefit. 
E)  external cost.

Question 2

The benefit that Joan gets from eating cherries is an example of

Accepted Answer

A)  when the external benefit equals the private benefit. 
B)  a private benefit. 
C)  an external benefit. 
D)  an external cost. 
E)  the marginal social cost of eating cherries. 
A)  when the external benefit equals the private benefit. 
B)  a private benefit. 
C)  an external benefit. 
D)  an external cost. 
E)  the marginal social cost of eating cherries.

Question 3

$$\begin{array} { c c c c } 
\begin{array} { c } 
\text { Quantity } \
\text { (tons of paper) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { private cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { external cost } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { social cost } \
\text { (dollars) }
\end{array} \
\hline 100 & 10 & 5 & - \
200 & 20 & 10 & - \
300 & 30 & 15 & - \
400 & 40 & 20 & - \
500 & 50 & 25 & - \
\hline
\end{array}$$
-The table above gives the private costs and external costs of producing paper.
a.Complete the table by finding the marginal social cost at each level of production.
b.If the market is competitive and is left unregulated and 400 tons of paper are produced,what is the price of a ton of paper?
c.If the government imposes a tax equal to the external cost at each level of production,what price would be charged if 400 tons are produced?

Accepted Answer

\[\begin{array} { c c c c } 
\begin{arra

Question 4

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.It also illustrates the marginal private benefit.There is no external benefit.The efficient number of concerts in Seattle is

Accepted Answer

A)  0. 
B)  5. 
C)  10. 
D)  20. 
E)  15. 
A)  0. 
B)  5. 
C)  10. 
D)  20. 
E)  15.

Question 5

A subsidy is

Accepted Answer

A)  the revenue received from the government to produce a good or service by a public authority. 
B)  a voucher received by the government from producers of goods and services. 
C)  a payment that the government makes to private producers of goods and services. 
D)  a tax imposed on the producers of certain goods or services. 
E)  a tax imposed on the consumers of certain goods or services. 
A)  the revenue received from the government to produce a good or service by a public authority. 
B)  a voucher received by the government from producers of goods and services. 
C)  a payment that the government makes to private producers of goods and services. 
D)  a tax imposed on the producers of certain goods or services. 
E)  a tax imposed on the consumers of certain goods or services.

Question 6

The production of paper creates pollution,an external cost.What happens to the production of paper if the government imposes a tax on paper producers equal to the marginal external cost of the pollution?

Accepted Answer

When the government imposes a tax equal

Question 7

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.If the government assesses the marginal external cost correctly,what is the amount of the pollution tax that eliminates the inefficiency?

Accepted Answer

A)  $2 per pound 
B)  $3 per pound 
C)  $4 per pound 
D)  $1 per pound. 
E)  None of the above answers is correct. 
A)  $2 per pound 
B)  $3 per pound 
C)  $4 per pound 
D)  $1 per pound. 
E)  None of the above answers is correct.

Question 8

Explain the difference between marginal social benefit and marginal external benefit.

Accepted Answer

Marginal social benefit equals the margi

Question 9

In the figure above,when the market is unregulated and in equilibrium,marginal social cost ________ marginal benefit,and the quantity of chemical produced is ________.

Accepted Answer

A)  exceeds; above the efficient quantity 
B)  exceeds; below the efficient quantity 
C)  is below; above the efficient quantity 
D)  is below; below the efficient quantity 
E)  equals; efficient 
A)  exceeds; above the efficient quantity 
B)  exceeds; below the efficient quantity 
C)  is below; above the efficient quantity 
D)  is below; below the efficient quantity 
E)  equals; efficient

Question 10

Which of the following is an example of an external cost?

Accepted Answer

A)  a grove of trees planted in a park in Seattle 
B)  a library built in Philadelphia 
C)  a new, faster computer chip 
D)  an oil spill off the coast of South America 
E)  a student graduating from college 
A)  a grove of trees planted in a park in Seattle 
B)  a library built in Philadelphia 
C)  a new, faster computer chip 
D)  an oil spill off the coast of South America 
E)  a student graduating from college

Question 11

If the marginal private cost of running a car is $0.30 a mile and the marginal external cost is $0.10,what is the marginal social cost?

Accepted Answer

A)  $0.20 
B)  $3.00 
C)  $0.03 
D)  $0.40 
E)  None of the above answers is correct. 
A)  $0.20 
B)  $3.00 
C)  $0.03 
D)  $0.40 
E)  None of the above answers is correct.

Question 12

If vouchers for a good or service given to consumers,then the supply curve ________ and the demand curve ________.

Accepted Answer

A)  shifts leftward; shifts leftward 
B)  shifts leftward; shifts rightward 
C)  shifts rightward; shifts rightward 
D)  does not shift; shifts rightward 
E)  shifts rightward; does not shift 
A)  shifts leftward; shifts leftward 
B)  shifts leftward; shifts rightward 
C)  shifts rightward; shifts rightward 
D)  does not shift; shifts rightward 
E)  shifts rightward; does not shift

Question 13

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

Accepted Answer

A)  deadweight loss when there is not the illustrated subsidy. 
B)  loss in efficiency from the illustrated subsidy. 
C)  gain in efficiency from the illustrated subsidy. 
D)  remaining deadweight loss when there is the illustrated subsidy. 
E)  equilibrium with the illustrated subsidy. 
A)  deadweight loss when there is not the illustrated subsidy. 
B)  loss in efficiency from the illustrated subsidy. 
C)  gain in efficiency from the illustrated subsidy. 
D)  remaining deadweight loss when there is the illustrated subsidy. 
E)  equilibrium with the illustrated subsidy.

Question 14

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect.Edu

Question 15

Which of the following is true regarding pollution charges?
i.They force a polluter to pay a price for its pollution.
ii.They are based on the marginal external cost of pollution.
iii.The fee that produces the efficient amount of pollution is easily determined.

Accepted Answer

A)  i only 
B)  i and ii 
C)  ii and iii 
D)  i, ii, and iii 
E)  i and iii 
A)  i only 
B)  i and ii 
C)  ii and iii 
D)  i, ii, and iii 
E)  i and iii

Question 16

-The figure shows the market for college education.If the market for education is competitive and with no government intervention,the equilibrium quantity of college students is ________ million and the efficient quantity of college students is ________ million.

Accepted Answer

A)  2; 4 
B)  8; 2 
C)  8; 4 
D)  4; 8 
E)  0; 10 
A)  2; 4 
B)  8; 2 
C)  8; 4 
D)  4; 8 
E)  0; 10

Question 17

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

Accepted Answer

External benefits to education include t

Question 18

Jacob pays $5,000 to paint his house because pollution from a nearby factory damaged the paint.To the factory,the $5,000 cost is

Accepted Answer

A)  a private cost and not an external cost. 
B)  an external cost and not a private cost. 
C)  both a private cost and an external cost. 
D)  neither a private cost nor an external cost. 
E)  a private benefit because viewers will benefit from watching the extra hour of the show. 
A)  a private cost and not an external cost. 
B)  an external cost and not a private cost. 
C)  both a private cost and an external cost. 
D)  neither a private cost nor an external cost. 
E)  a private benefit because viewers will benefit from watching the extra hour of the show.

Question 19

When there is a marginal external ________ producers take account only of marginal private cost and produce ________ than the efficient quantity.

Accepted Answer

A)  cost; more 
B)  cost; less 
C)  benefit; more 
D)  benefit; less 
E)  increase; more 
A)  cost; more 
B)  cost; less 
C)  benefit; more 
D)  benefit; less 
E)  increase; more

Question 20

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

Accepted Answer

A)  0 
B)  150 billion 
C)  200 billion 
D)  100 billion 
E)  more than 200 billion 
A)  0 
B)  150 billion 
C)  200 billion 
D)  100 billion 
E)  more than 200 billion

When the government uses a private subsidy in a market with an external benefit,to reach the efficient quantity of production,the subsidy must be equal to the marginal

The benefit that Joan gets from eating cherries is an example of

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.It also illustrates the marginal private benefit.There is no external benefit.The efficient number of concerts in Seattle is

A subsidy is

The production of paper creates pollution,an external cost.What happens to the production of paper if the government imposes a tax on paper producers equal to the marginal external cost of the pollution?

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.If the government assesses the marginal external cost correctly,what is the amount of the pollution tax that eliminates the inefficiency?

Explain the difference between marginal social benefit and marginal external benefit.

In the figure above,when the market is unregulated and in equilibrium,marginal social cost marginal benefit,and the quantity of chemical produced is .

Which of the following is an example of an external cost?

If the marginal private cost of running a car is $0.30 a mile and the marginal external cost is $0.10,what is the marginal social cost?

If vouchers for a good or service given to consumers,then the supply curve and the demand curve .

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

Which of the following is true regarding pollution charges? i.They force a polluter to pay a price for its pollution. ii.They are based on the marginal external cost of pollution. iii.The fee that produces the efficient amount of pollution is easily determined.

-The figure shows the market for college education.If the market for education is competitive and with no government intervention,the equilibrium quantity of college students is million and the efficient quantity of college students is million.

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

Jacob pays $5,000 to paint his house because pollution from a nearby factory damaged the paint.To the factory,the $5,000 cost is

When there is a marginal external producers take account only of marginal private cost and produce than the efficient quantity.

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 10: Externalities

When the government uses a private subsidy in a market with an external benefit,to reach the efficient quantity of production,the subsidy must be equal to the marginal

The benefit that Joan gets from eating cherries is an example of

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.It also illustrates the marginal private benefit.There is no external benefit.The efficient number of concerts in Seattle is

A subsidy is

The production of paper creates pollution,an external cost.What happens to the production of paper if the government imposes a tax on paper producers equal to the marginal external cost of the pollution?

-The figure above shows the market for the chemical hydrogen sulfide,the production of which creates an external cost.If the government assesses the marginal external cost correctly,what is the amount of the pollution tax that eliminates the inefficiency?

Explain the difference between marginal social benefit and marginal external benefit.

In the figure above,when the market is unregulated and in equilibrium,marginal social cost ________ marginal benefit,and the quantity of chemical produced is ________.

Which of the following is an example of an external cost?

If the marginal private cost of running a car is $0.30 a mile and the marginal external cost is $0.10,what is the marginal social cost?

If vouchers for a good or service given to consumers,then the supply curve ________ and the demand curve ________.

-The figure above shows the market for annual influenza immunizations the United States.Area A + Area B is the

"Education in elementary and high schools has external benefits because families who have a lot of children do not pay any more than families without children." Is this statement correct or incorrect? Explain your answer.

Which of the following is true regarding pollution charges? i.They force a polluter to pay a price for its pollution. ii.They are based on the marginal external cost of pollution. iii.The fee that produces the efficient amount of pollution is easily determined.

-The figure shows the market for college education.If the market for education is competitive and with no government intervention,the equilibrium quantity of college students is ________ million and the efficient quantity of college students is ________ million.

Describe some of the external benefits associated with education.What can government do to encourage production of the efficient amount of education?

Jacob pays $5,000 to paint his house because pollution from a nearby factory damaged the paint.To the factory,the $5,000 cost is

When there is a marginal external ________ producers take account only of marginal private cost and produce ________ than the efficient quantity.

-The figure above shows the marginal social cost curve of generating electricity,the marginal private cost curve,and the demand curve.If the Coase theorem can be used in this market,output equals ________ kilowatt hours per day.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

In the figure above,when the market is unregulated and in equilibrium,marginal social cost marginal benefit,and the quantity of chemical produced is .

If vouchers for a good or service given to consumers,then the supply curve and the demand curve .

-The figure shows the market for college education.If the market for education is competitive and with no government intervention,the equilibrium quantity of college students is million and the efficient quantity of college students is million.

When there is a marginal external producers take account only of marginal private cost and produce than the efficient quantity.